Question Details

How might a company obtain a price index in order to apply dollar-value LIFO 



1.	When a company uses LIFO for external reporting purposes and FIFO for internal reporting purposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported
a.	on the income statement in the Other Revenues and Gains section.
b.	on the income statement in the Cost of Goods Sold section.
c.	on the income statement in the Other Expenses and Losses section.
d.	on the balance sheet in the Current Assets section.

	2.	What happens when inventory in base year dollars decreases?
a.	LIFO reserve increases.
b.	LIFO layer is created.
c.	LIFO layer is liquidated.
d.	LIFO price index decreases.

	3.	How might a company obtain a price index in order to apply dollar-value LIFO ?
a.	Calculate an index based on recent inventory purchases.
b.	Use a general price level index published by the government.
c.	Use a price index prepared by an industry group.
d.	All of the above.

	4.	In the context of dollar-value LIFO, what is a LIFO layer?
a.	The difference between the LIFO inventory and the amount used for internal reporting purposes.
b.	The LIFO value of the inventory for a given year.
c.	The inventory in base year dollars.
d.	The LIFO value of an increase in the inventory for a given year.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help